SAP president: UK growth at risk of contagion from Eurozone

Franck Cohen said that although the UK is leading the EMEA pack, it is being put at risk by southern Europe

SAP president for Europe, the Middle East and Africa (EMEA), Franck Cohen, has warned that the UK’s prospects of growth is at risk of contagion from the Eurozone and southern European countries that are battling against tough macroeconomic conditions.

Releasing its second quarter results today, SAP posted total revenue growth of 18 per cent over the same quarter last year to €3.9bn (£3.2bn), following record software revenue of over €1bn.

The enterprise software company said all regions posted double-digit software revenue gains, while demand for SAP's new offerings continued to grow.

However, Cohen told Computerworld UK that EMEA, and the UK in particular, are performing well against other SAP regions.

“EMEA is performing very well this quarter, above average. The number we have released this morning for all SAP regions shows a 19 per cent software revenue growth year-on-year, while EMEA is at 22 per cent,” said Cohen.

“The good news is that the UK is far above the EMEA average. We had a fantastic quarter, mainly driven by key deals we made with large customers like Kingfisher.”

Cohen said that the UK is proving to be an ‘early adopter’ of new SAP technologies, such as its in-memory analytics platform HANA.

He explained: “I would say that the UK is leading the pack when it comes to adoption of our new innovative products. I don’t like to disclose country-specific figures, but when I say that it is performing well above the EMEA average, it really is well above.”

However, Cohen expressed concern that this may not continue if the ongoing problems with the Eurozone become worse.

He believes that countries in northern Europe are strong, but could still suffer from macroeconomic turmoil.

“I think southern Europe is a challenge for us. Northern Europe is growing at above 25 per cent, but the southern countries are flat year-on-year for the first half of the year,” said Cohen.

“We are seeing a significant gap and of course it reflects the macroeconomic situation. I don’t see any improvement in the near term in southern Europe, the next six months aren’t likely to get any better.”

He added: “If the Eurozone continues to deteriorate, there is a risk of contagion coming from the south of Europe. All countries in Europe are connected with each other, so I definitely see a risk from this point of view.”

SAP also said today that it had benefited in the cloud market from its February acquisition of cloud software company SuccessFactors, leading to a 112 per cent increase year-on-year in 12-month new and upsell subscription billings for SuccessFactors on a stand-alone basis. Cloud revenue was €69m in the quarter.

The company said it recorded €85m in business from HANA in the quarter, putting it on track to meet its forecast of at least €320m for the year. Mobile revenue was €54m against a target of €220m for the year.